Cashflow driving Treaty claims system is drying up during power struggle and ensuing feeding frenzy for lawyers, says minister

Treaty Settlements Minister Chris Finlayson has launched a stinging attack on former High Court judge and Waitangi Tribunal chairman Sir Eddie Taihukurei Durie, saying he is disappointed in the way "someone who has sought high judicial office" acted in a power struggle which has seen more than $1 million from a Treaty settlement research fund spent on lawyers' fees.

The strong words came from Mr Finlayson during an interview in which he said his patience had snapped with the Crown Forestry Rental Trust and its squabbling Maori trustees.

Mr Finlayson said infighting on the body - caretaker of $300 million in forestry assets - had disrupted the Treaty settlement process and he singled out Sir Eddie's role in making allegations against Crown-appointed chairwoman Angela Foulkes.

"It's particularly disappointing when someone has held high judicial office and is making those sorts of allegations," said Mr Finlayson.

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A Herald investigation into the infighting has found the trust largely paralysed for almost two years after Sir Eddie was appointed as a trustee and began questioning the processes used to award millions of dollars in research money.

The money - about $30 million a year - is paid out from rentals earned on the forestry assets and used to fund research into Waitangi Tribunal claims.

Court papers show Sir Eddie's questions about process led to claims of conflicts of interest among trustees, accusations of improper behaviour and ultimately a string of court cases which have spent 18 months in the High Court and are now headed for the Court of Appeal.

The case involves some of Maoridom's most prominent figures - the NZ Maori Council has Sir Eddie, John Tamihere, Donna Huata, Titewhai Harawira and Graham Latimer among its number. On the Federation of Maori Authorities' side is company director Traci Houpapa, business leader James Wheeler and academic Dr Riri Ellis.

Together, the council and federation are meant to appoint three Maori trustees who sit opposite three Crown trustees, who together decide which claims should be funded. The dysfunction of the trust is such that High Court Justice Stephen Kos will issue a decision this week which is expected to appoint trustees - a decision meant to be made by the Maori Council and the federation.

While there is dispute over who was responsible for the case going to court, it was lodged by the NZ Maori Council as the first applicant with Sir Eddie as a second.

Accounts for the trust show more than $1 million was spent on legal fees in the 2013-2014 financial year, with those involved in the case confirming the total cost as being much higher.

In an affidavit, trust chairwoman Angela Foulkes said by August 2013 the dispute had caused 12 applications for $8 million of funding of progress Treaty claims to be frozen.

Court files show letters from Ms Foulkes to Mr Finlayson, Finance Minister Bill English and the Maori Land Court chief judge Wilson Isaac warning the flow of cash driving the Treaty claims system was drying up. Judge Isaac had already raised an alarm over the stoush in January 2013, listing a schedule of hearings and warning "the impact of your decision across the majority of our work programme will be major".

Mr Finlayson said Ms Foulkes was a "tremendous person" and the halting of the funding had forced him to approach the Cabinet on a number of occasions to keep the Treaty settlement process going. He said he had to seek permission for money from the Office of Treaty Settlements to fund research - money which was meant to come from the trust.

"There may need to be a legislative solution. I may have to talk to Parliament about it. It's been a problem for two years and is causing me considerable concern."

He said the rising legal bill was "the most appalling thing of all. It's become a feeding frenzy for lawyers."

Sir Eddie said Mr Finlayson needed to appoint an independent judge to inquiry into the dysfunction on the board. "I'm deeply saddened to hear the minister has the views that he has. He has not spoken to me about these matters. He appears to be misinformed."

Sir Eddie - also former chief judge of the Maori Land Court - said Maori were being forced through the trust to conform to a Crown mode of Treaty settlement.

He said he would welcome an amendment to the trust structure. "There is a serious problem with two separate bodies appointing three trustees. Two into three don't go. You have a structural problem."

Federation chairwoman Traci Houpapa said there had been "extraordinary pressure and stress" on all involved. "It's cost everyone involved an extraordinary amount of time, money, stress and heartache and it needs to stop."

Ms Foulkes, who is no longer chairwoman, said the row had been unpleasant. "It's been a very long and difficult two years. If people have fixed views ... it becomes difficult to unscramble."